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Meritor Reports Second - Quarter Fiscal Year 2021 Results May 4 , 2021 TROY , Mich . , May 4 , 2021 / PRNewswire / -- Meritor , Inc. ( NYSE : MTOR ) today reported financial results for its second fiscal quarter that ended March 31 , 2021 . Second - Quarter Highlights MERITOR® • Sales of $ 983 million • Net income attributable to Meritor and net income from continuing operations attributable to Meritor of $ 63 million • Diluted earnings per share from continuing operations of $ 0.86 ● Adjusted income from continuing operations attributable to the company of $ 50 million , or $ 0.68 per adjusted diluted share Adjusted EBITDA of $ 111 million and adjusted EBITDA margin of 11.3 percent Operating cash flow of $ 63 million • Free cash flow of $ 47 million ● ● Change in Non - GAAP Measures Beginning in the second quarter of fiscal year 2021 , the company revised its presentation of two non - GAAP measures , adjusted income ( loss ) from continuing operations and adjusted diluted earnings ( loss ) per share , to better align with SEC guidance . The adjustment for non - cash tax expenses related to the use of deferred tax assets in jurisdictions with net operating loss carryforwards or tax credits will no longer be included in these two non - GAAP measures ; however , the underlying availability and benefit of the tax attributes to offset taxable income has not changed . For comparability , references to prior periods ' non - GAAP measures have also been updated to show the effect of omitting the non - cash tax expense adjustment from adjusted income ( loss ) from continuing operations and adjusted diluted earnings ( loss ) per share - see proforma table below . Second - Quarter Results For the second quarter of fiscal year 2021 , Meritor posted sales of $ 983 million , up $ 112 million , or approximately 13 percent , from the same period last year . The increase in sales was primarily driven by higher global truck production in all markets , partially offset by the impact of the termination of our distribution arrangement with WABCO Holdings , Inc. ( " WABCO " ) , which occurred late in the second quarter of fiscal year 2020 . Net income attributable to Meritor was $ 63 million , or $ 0.86 per diluted share , compared to $ 241 million , or $ 3.20 per diluted share , in the same period last year . Net income from continuing operations attributable to Meritor was $ 63 million , or $ 0.86 per diluted share , compared to $ 240 million , or $ 3.19 per diluted share , in the same period last year . Lower net income year over year was driven primarily by $ 203 million of after - tax income associated with the termination of the distribution arrangement with WABCO during the second quarter of fiscal year 2020 , partially offset by the recognition of $ 15 million of after - tax income related to value - added tax credits in Meritor's wholly - owned Brazilian subsidiary during the second quarter of fiscal year 2021 and cost reduction actions executed in the second half of fiscal year 2020 . Adjusted income from continuing operations attributable to the company in the second quarter of fiscal year 2021 was $ 50 million , or $ 0.68 per adjusted diluted share , compared to $ 48 million , or $ 0.64 per adjusted diluted share , in the same period last year . Adjusted EBITDA was $ 111 million , compared to $ 107 million in the second quarter of fiscal year 2020. Adjusted EBITDA margin was 11.3 percent , compared to 12.3 percent in the same period last year . The increase in adjusted EBITDA year over year was driven primarily by conversion on higher sales and cost reduction actions executed in the second half of the prior fiscal year , partially offset by higher incentive compensation and freight costs . Adjusted EBITDA margin decreased year over year due primarily to increased incentive compensation expense . Cash provided by operating activities was $ 63 million in the second quarter of fiscal year 2021 , compared to cash provided by operating activities of $ 309 million in the second quarter of fiscal year 2020. The decrease in operating cash flow year over year was driven primarily by $ 265 million of cash received from the termination of the distribution arrangement with WABCO in the second quarter of fiscal year 2020 . Second - Quarter Segment Results Commercial Truck sales for the second quarter of fiscal year 2021 were $ 777 million , up $ 146 million , or 23 percent , compared to the same period last year . The increase in sales was primarily driven by higher global truck production in all markets . Segment adjusted EBITDA for Commercial Truck was $ 73 million , up $ 15 million , compared to the second quarter of fiscal year 2020. Segment adjusted EBITDA margin increased to 9.4 percent in the second quarter of fiscal year 2021 , compared to 9.2 percent in the same period of the prior year . The increase in segment adjusted EBITDA and segment adjusted EBITDA margin was driven primarily by conversion on higher revenue and cost reduction actions , partially offset by higher incentive compensation and freight costs . The Aftermarket & Industrial segment posted sales of $ 247 million in the second quarter of fiscal year 2021 , down $ 30 million , or 11 percent , from the same period a year ago . The decrease in sales in the second quarter of fiscal year 2021 was due primarily to the impact from the termination of the WABCO distribution arrangement . Segment adjusted EBITDA for Aftermarket & Industrial was $ 34 million , down $ 12 million , compared to the second quarter of fiscal year 2020. Segment adjusted EBITDA margin decreased to 13.8 percent in the second quarter of fiscal year 2021 , compared to 16.6 percent in the same period of the prior year . The decrease in segment adjusted EBITDA and segment adjusted EBITDA margin was driven primarily by the impact from the termination of the WABCO distribution arrangement and increased incentive compensation costs , partially offset by cost reduction actions . Capital Structure The company is announcing today that it will issue a notice of redemption for the remaining aggregate principal amount of its 6.25 % notes due 2024 in the amount of $ 175,000,000 .